Pension system reform will involve pain
Irrationally generous "relief measures" will definitely fail to win public understanding.
The ruling Democratic Party of Japan's study panel on welfare and labor issues has decided not to ask for repayment of excess national pension benefits paid to housewives whose spouses were formerly company or public-sector employees.
They have received more pension benefits than they were entitled to because they failed to update their pension status.
In line with the decision, the government will shortly have the Cabinet adopt a bill to revise the National Pension Law, to be submitted to the current extraordinary Diet session.
However, the plan faces strong criticism that it will appear to make honesty not pay.
We believe the government must in principle ask those concerned to repay the excess pension benefits they have received.
In this respect, we seriously question the way the DPJ makes policy decisions.
The people in question are full-time housewives whose spouses are company or government employees. Called Category III beneficiaries, they do not have to pay pension premiums themselves.
After their husbands leave their jobs or their own annual income reaches 1.3 million yen or more, however, they are required to switch to the national pension program and start paying their own pension premiums.
But it came to light that about 420,000 housewives younger than eligibility age have failed to switch to the national pension program and thus have not paid the premiums they are supposed to pay.
Because of the error, about 53,000 pensioners already receive excess benefits averaging more than 10,000 yen per year.
No firm decision made
The government and the DPJ went back and forth over this problem.
In March last year, then Health, Labor and Welfare Minister Akira Nagatsuma decided to disregard unpaid pension premiums by the housewives in question, effectively deeming them to have appropriately paid pension premiums.
However, this decision drew fierce criticism.
It was called unfair to treat those who did not pay premiums the same way as the many people who went through the necessary procedures and paid the pension premiums as required.
Consequently, Ritsuo Hosokawa who succeeded Nagatsuma as welfare minister withdrew the decision in March this year.
In May, the welfare ministry's Social Security Council came up with a compromise proposal whereby those who have already received excess pension benefits as a result of not switching to the national pension program would be asked to repay the excess amount they received in the past five years, the period not excluded by the statute of limitations. At the same time, the proposal called for reductions or exemptions for low-income earners.
However, in the process of compiling a bill to revise the National Pension Law, opposition to the plan grew within the party, with some members insisting no requests should be made to return excess pension benefits.
As a result, the government and the DPJ made another policy switch on Nov. 1. Former welfare minister Nagatsuma, the one who initially threw the matter into confusion by proposing the excessive relief measure, took the lead in compiling the latest plan.
Basic principle at stake
Opponents to the proposed benefit repayment were apparently wary of its possible adverse effect on future elections, worrying that it could be taken as ill treatment of the elderly.
But it is a basic principle of social insurance that members of the public should receive benefits in accordance with their premium payments.
In light of this principle, it is unreasonable not to ask everyone to return excess benefits.
The public will definitely be asked to endure some pain during the overhaul of the pension system and other social security programs.
Progress cannot be made on social security reform unless the DPJ has the resolve to persuade the public of its necessity.
(From The Yomiuri Shimbun, Nov. 7, 2011)